The U.S. Senate bill overhauling Obamacare would result in 22 million fewer Americans with health insurance by 2026 and $772 billion less in Medicaid spending if it becomes law, according to the heavily anticipated estimate from the Congressional Budget Office.
- 15 million to be removed from healthcare insurance in 2018 alone.
- Federal deficit to be cut by $321 billion over the next decade.
- Between 2017-2026 the US will see a reduction of $772 billion in federal outlays for Medicaid.
- The wealthiest in society would benefit from the deal with tax cuts.
The CBO’s analysis of the Senate bill is largely similar to their analysis of the House bill, which predicted a 24 million drop in people who were covered. That report, along with widespread unpopularity, helped prompt Congressional Republicans to give up on passing the first iteration of the law in late March – until passing a slightly modified version of the bill in May.
Trump officials explain… kind of
Kellyanne Conway, counselor to the President, said, “These are not cuts to Medicaid. This slows the rate for the future and allows governors more flexibility with Medicaid dollars because they’re closest to the people in need. If you are currently in Medicaid, if you became a Medicaid recipient through the Obamacare expansion, you are grandfathered in. We’re talking about in the future.”
But the CBO says that Medicaid will receive $772 billion in cuts over the next 10 years.
Secretary of Health and Human Services Tom Price said, “The plan in its entirety will absolutely bring premiums down. Because you increase competition, you increase choices for individuals, you allow folks to be able to purchase the kind of coverage that they want, not just the government forces them to buy. Those are all of the secret keys to a market that actually works for health care and works for patients, that’s the key.”
While premiums would spike in the short term if the Senate bill became law, by 2026 premiums would be about 20% lower, although they would be offering much skimpier benefits.
This is because non-group insurance would pay for a smaller average share of benefits under this legislation, most people purchasing it would have higher out-of-pocket spending on health care than under current law.
Senate bill is actually worse than the House bill — slightly fewer uninsured, but higher out of pocket expenses. https://t.co/ODNHGQeyEy
— Paul Krugman (@paulkrugman) June 27, 2017
Tax cuts for the wealthy
A wide range of tax increases financed the Affordable Care Act, mostly targeting high earners. The single biggest tax cut included in this new Senate bill is the repeal of the 3.8 percent tax the Affordable Care Act applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for singles).
So by definition, this is a tax cut that only helps the rich.
Then there’s the 0.9 percent Medicare surtax, a hike on wage income in excess of $250,000 a year ($200,000 for unmarried people). The Republican bill would repeal this surtax and, in so doing, give everyone in the bottom 90 percent an average tax cut of $0, per the Tax Policy Center. The richest of the rich, the top 0.1 percent, would get an average cut of $30,520.
The Medicare surtax and the investment tax alone combine to a tax cut of $195,610 for the top 0.1 percent, not far off from the $197,340 average cut estimated for full repeal of Obamacare.
JCT estimates AHCA repeal of NIIT & Medicare taxes on high earners still cost $40B/year by 2026. Means this TPC distribution still accurate. pic.twitter.com/PGTqamJzSO
— Lily Batchelder (@lilybatch) May 24, 2017
A murky future
The House and Senate Obamacare replacement bills do nothing to achieve President Trump’s or GOP’s goals of providing lower health insurance premiums/deductibles, comparable protection for those with pre-existing medical conditions or stabilization of private health insurance markets. The over 20 million Americans who will now be without health insurance, achieves the false economy of reducing the federal deficit by transferring the costs of providing medical care of the uninsured to the insured and spend over $320 trillion on wasteful inefficient tax breaks.
Underinsured and uninsured millions will still get sick and have to be treated in the America’s overwhelmed urgent care facilities. Millions of American’s will be forced into bankruptcy by medical bills, something no other modern advanced economy allows to occur.
This bill is a hoax being perpetrated on the American people, a ruse to provide tax breaks for the wealthy. Surely we are better than this.
If all you read is Fox, you'd have no idea Senate about to take away your healthcare. pic.twitter.com/VglOsKuwLv
— Ian Bassin (@ianbassin) June 27, 2017